Police in Mumbai are stepping up patrols of major US outlets including McDonald's

Indian protesters have ransacked a Domino's Pizza outlet in a Mumbai suburb, demanding a ban on US goods, as officials from the two countries tried to defuse a dispute over the arrest of an Indian diplomat in New York.

The United States said it wanted to "move beyond" the matter and underscored the importance of its ties with India, but a senior Indian official called for an American apology.

Police and the Indian franchise of the US chain said no one was hurt in the attack, which came amid unrelenting rage in India over the arrest and subsequent strip-search of Devyani Khobragade for visa fraud and under-payment of her housekeeper, also an Indian national.

India has demanded that the charges be dropped against the diplomat. Her father threatened to begin a fast if US authorities press ahead with the case. In an unusual move, the United States has flown the family of the housekeeper, Sangeeta Richard, out of India.

Police in Mumbai said they were stepping up patrols of major US outlets including McDonald's after workers of the small Republican Party of India attacked the Domino's store. The group sent pictures to media organisations showing a broken glass door.

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"The fact is that (the) American authorities have behaved atrociously with an Indian diplomat. And obviously, America has to make good for its actions," said Manish Tiwari, India's minister for information and broadcasting.

"So therefore, I think it is a legitimate expectation, that if they have erred, and they have erred grievously in this matter, they should come forth and apologise."

Dr Khobragade serves as India's deputy consul general in New York.

In an apparent attempt by India to find a way out of the crisis, the United Nations said it received an official request from New Delhi to accredit Dr Khobragade as a member of that country's permanent UN mission in what appeared to be a move to give her a stronger form of diplomatic immunity.

Diplomatic sources said that while such broader immunity could not be applied retroactively to cover the charges she faces by removing the indictment, it could make it harder to follow through on a prosecution against her.

US State Department spokeswoman Jen Psaki said any change in the diplomat's accreditation status would not provide a "clean slate from past charges."